VN Capital Solicits Proxies to Terminate Ceres Management Contract
Urges Shareholders to Vote Yes on the Resolutions Proposed at the July 24, 2013 Special Meeting of Ceres Global Ag Corp. Shareholders
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 07/09/13 -- VN Capital Management, LLC ("VN Capital"), a minority shareholder of Ceres Global Ag Corp. ("Ceres"), publicly announced today that it urges shareholders of Ceres to vote to terminate the management contract between Ceres and Front Street Capital 2004 ("Front Street") at Ceres' July 24th Special Shareholder Meeting because the contract improperly favors Front Street at the expense of the other Ceres shareholders. Proxies in favor of the resolutions proposed by VN Capital are being solicited by way of this press release by VN Capital. VN Capital beneficially owns or exercises control or direction over 1,174,700 common shares or approximately 8.2% of the outstanding common shares of Ceres.
VN Capital believes that the Front Street's management contract with Ceres needs to be terminated because:
Ceres shareholders will vote on an extraordinary resolution approving the termination of the management agreement between Ceres and Front Street and provide irrevocable notice of such termination to Front Street. The meeting will be held at the Chairman's Boardroom at One King Street West, Toronto, Ontario on July 24, 2013 at 11:00am (Toronto time).
How to Support VN Capital
Registered Shareholders
Ceres shareholders that have a physical share certificate for Ceres common shares registered in their own name (the "Ceres Registered Shareholders") who wish to support the resolutions to terminate the Front Street management contract can do so by completing, signing, dating and returning the YELLOW form of proxy with the heading "VN CAPITAL FORM OF PROXY" to VN Capital by facsimile at 1-212-393-1148 or by email to .
The VN CAPITAL FORM OF PROXY can be obtained by contacting VN Capital by telephone at 1-212-393-1140 or by email at . The VN CAPITAL FORM OF PROXY can also be obtained on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at under Ceres' profile at .
In order to ensure that a YELLOW VN CAPITAL FORM OF PROXY can be used at Ceres' special shareholders meeting, it should be returned to VN Capital by 5 p.m. on July 19, 2013. VN Capital will continue to accept proxies up until the time of the meeting and will make every effort to deliver any proxies received for use at the meeting.
Ceres Registered Shareholders who wish to vote in favor of the extraordinary resolutions but have already completed a form of proxy appointing someone other than VN Capital may revoke their previously completed form of proxy by completing, signing, dating and returning a VN CAPITAL FORM OF PROXY to VN Capital by facsimile at 1-212-393-1140 or by email to .
Beneficial Shareholders
Ceres shareholders who do not hold their Ceres Shares in their names (for example, through a bank, trust company, securities dealer or broker or other intermediary) (the "Ceres Beneficial Shareholders") who wish to support the resolutions to terminate the Front Street management contract are urged to complete the voting instruction form received from their intermediary marked to vote "For" on the resolutions and return the voting instruction form in accordance with the instructions provided by their intermediary.
Ceres Beneficial Shareholders who have previously completed a voting instruction form against the resolutions should contact their intermediary as soon as possible in order to either obtain a new voting instruction form that will enable the shareholder to vote "For" the resolutions or change the previous voting instructions from "Against" to "For" on the resolutions.
Information in Support of Public Broadcast Solicitation
VN Capital and its managing members are relying on the exemption under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations and section 112(1.2) of the Business Corporations Act (Ontario) to make public broadcast solicitations. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
Matters to be Acted Upon
Ceres has called a special meeting of shareholders to be held at the Chairman's Boardroom at One King Street West, Toronto, Ontario on July 24, 2013 at 11:00 am (Toronto time) to consider and, if thought fit, to pass the following resolutions proposed by VN Capital:
The Management Agreement Termination Resolution is an extraordinary resolution and requires approval by 66 2/3% of the votes validly cast on the resolution at the meeting.
Solicitation by VN Capital
This solicitation is being made by VN Capital and not by or on behalf of the management of Ceres.
VN Capital and its managing members may solicit proxies for the Ceres shareholders' meeting in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications. In addition, in accordance with applicable Canadian laws, proxies may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of VN Capital, who will not be specifically remunerated therefore. Proxies may also be solicited by any other manner permitted under applicable Canadian laws. No agents have been engaged to assist in soliciting proxies on behalf of VN Capital; however, VN Capital reserves the right to engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of VN Capital. All costs incurred for the solicitation will be borne by VN Capital.
A registered holder of common shares of Ceres that gives a proxy may revoke it: (a) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney, who is authorized in writing, or by transmitting, by telephonic or electronic means, a revocation signed by electronic signature by the shareholder or by the shareholder's attorney, who is authorized in writing: (i) to or at the registered office of Ceres at any time up to and including the last business day preceding the day the meeting of Ceres shareholders or any adjournment thereof, or (ii) with the chairman of the meeting on the day of, and prior to the start of, the meeting or any adjournment thereof; or (b) in any other manner permitted by law. The address of Ceres is 33 Yonge Street, Suite 600, Toronto, Ontario M5E 1G4. A non-registered holder of common shares of Ceres will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.
About VN Capital
James T. Vanasek and Patrick Donnell Noone founded VN Capital in March 2002 and VN Capital launched its first and only fund, the VN Capital Fund I, LP, in June 2002. In addition, since September 2012, pursuant to an investment management agreement VN Capital acts as the investment manager for PVF-JP, LP a Delaware Limited Partnership (the "PVF Partnership"), which is operated in a manner similar to the VN Capital Fund I, LP. VN Capital exercises control or direction over the voting of the securities held by the VN Capital Fund I, LP and the PVF Partnership.
VN Capital was founded on the belief that long term wealth accumulation is derived from exhaustive bottom-up proprietary research coupled with a conservative, value equity investing philosophy exhibiting low portfolio turnover, minimal expenses, and selective hedging. VN Capital manages a concentrated portfolio of six to twelve small and micro-cap stocks that are publicly traded in the United States and Canada from easily understood industries that are either overlooked by the broad investment community or that are unfairly tainted by news affecting their respective economic areas.
VN Capital Fund I, L.P. is a Delaware limited partnership formed to engage in the business of acquiring, holding and disposing of investments in various companies. The general partners of VN Capital Fund I, L.P. are VN Capital and Joinville Capital Management, LLC ("Joinville"). VN Capital and Joinville are Delaware limited liability companies formed to be the general partners of VN Capital Fund I, L.P. Messrs. Vanasek and Noone are the Managing Members of VN Capital and Joinville, and have been since March 2002, and have held no other occupations during that time. The address of the principal offices of VN Capital is 1133 Broadway, Suite 1609, New York, New York 10010. The business address of Messrs. Vanasek and Noone is c/o VN Capital at the foregoing address.
None of VN Capital or Messrs. Vanasek or Noone have been dissidents of any body corporate in the past ten years.
Background to and Nature of VN Capital's Dissident Activities
VN Capital first invested in Ceres on August 6, 2010 and over the next two years Messrs. Vanasek and Noone regularly spoke with Ceres' Chief Financial Officer, Jason Gould, after the company released its quarterly financial results. In addition, Messrs. Vanasek and Noone travelled to Toronto on January 17, 2012 and met with members of Ceres' leadership team - Tom Muir, Chief Transactions Officer, and Mr. Gould. During those conversations, VN Capital repeatedly reiterated the need for Ceres to have better shareholder communications, improved corporate governance and for Ceres to make the transition to a true operating company by terminating the Front Street management agreement and replacing it with an internal management team.
After not seeing any progress by Ceres on those fronts, on November 20, 2012 Mr. Vanasek contacted Mr. Gould and requested a meeting with John Heimbecker, the chair the Nominating and Corporate Governance Committee of the Board of Ceres, to bring these matters to his attention. Mr. Gould arranged a conference call on December 20, 2013 for VN Capital, however Mr. Heimbecker failed to participate. Gary Selke, Chief Executive Officer, and Messrs. Muir and Gould were present on behalf of Ceres.
After making numerous attempts during January 2013 to try and speak with Mr. Heimbecker to no avail, on January 28, 2013 VN Capital sent a letter to Mr. Selke advising of its intention to formally requisition a special meeting of shareholders to vote to terminate the management agreement between Ceres and Front Street. In the letter, VN Capital stated its opinion that the excessive management fees paid to Front Street, the open nature of the management agreement and incentive fee structure, and Ceres' poor corporate governance and inadequate investor relations program had dragged down Ceres stock price.
After speaking with Mr. Selke on January 31, 2013, VN Capital advised Ceres that it would delay requisitioning a special meeting until February 28 to provide Ceres' Board time to respond to the issues raised in VN Capital's letter.
Ceres' Board established a special committee on February 5, 2013 and responded to VN Capital in a letter dated February 21, 2013. Ceres' letter failed to adequately respond to VN Capital's concerns. On March 6, 2013, VN Capital issued a press release announcing the requisition of the special meeting of shareholders and highlighting its concerns that the excessive fees paid to Front Street depress Ceres' stock price because the market feels that Ceres is being run for the benefit of Front Street and not Ceres shareholders. VN Capital called for (i) the termination of Ceres' management agreement with Front Street and (ii) Ceres to adopt a dedicated internal management team to run the company independent of Front Street, ensuring a clean, transparent and accountable financial record.
On March 8, 2013, Front Street issued a press release acknowledging VN Capital's concerns and stating that it would examine all possibilities with respect to moving Ceres forward.
On March 21, 2013, VN Capital provided a proposal to Ceres entitled "A New Vision for Ceres Global Ag Corp. - An Operating Company With An Operating Company Structure". VN Capital proposed:
VN Capital believed that at the end of the transition period the new Ceres would have a dedicated full-time management team, transparent SG&A costs, a conflict-free governance structure, appropriate, shareholder-focused stewardship and a new lease on life, free from its past as a failed closed-end fund with a hedge fund fee structure.
After hearing nothing from the independent committee for almost two months, on May 14, 2013 VN Capital wrote to Brian Little, chairman of the special committee of the Ceres Board, and expressed its concerns about the delay and apparent inaction by the committee to address this urgent matter.
On May 17, 2013 Mr. Little responded and asked VN Capital to sign a non-disclosure agreement. VN Capital refused as such an agreement was not necessary to facilitate discuss of VN Capital's proposed solution and because to do so could lead to VN Capital's managed funds being prohibited from purchasing further Ceres shares.
Ceres filed the Notice of Special Meeting of Shareholders and the Management Information Circular on June 28, 2013. VN Capital issues a press release on July 3, 2013 stating its intention to vote in favour of the resolutions to terminate the Front Street management agreement and to prevent the company from entering into any futures agreements with Front Street to provide management and administrative services. VN Capital's reasons for voting in favour of the resolutions were based on the following:
Ownership of Ceres Common Shares
As of July 8, 2013 VN Capital beneficially owns or exercises control or direction over 1,174,700 shares, representing approximately 8.2% of Ceres' outstanding common shares. Of that amount, 870,000 shares are owned by the VN Capital Fund I, LP while 304,700 shares are owned by the PVF Partnership. Messrs. Vanasek and Noone, as Managing Members of VN Capital, are also considered to beneficially own or otherwise exercise control or direction over the common shares of Ceres owned or over which VN Capital exercises control or direction.
The following table sets out the purchases and sales of Ceres common shares conducted by or for the benefit of VN Capital Fund I, LP and the PVF Partnership.
No funds were borrowed or otherwise obtained for the purpose of acquiring or holding the Ceres common shares. None of VN Capital or Messrs. Vanasek or Noone, as dissidents, nor Joinville, the VN Capital Fund I, LP or the PVF Partnership is or has been within the preceding year, a party to a contract, arrangement or understanding with any person in respect of securities of Ceres, including joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits or the giving or withholding of proxies.
To the knowledge of VN Capital and Messrs. Vanasek and Noone, based on Ceres' public filings, as at June 21, 2013 no persons beneficially owned, directly or indirectly, or exercised control or direction over 10% or more of the voting rights attached to the outstanding common shares of Ceres except: (i) Front Street Capital 2004 (an Ontario general partnership) which held 2,891,120 common shares (including shares held or controlled directly or indirectly by Front Street Capital 2004 partners, as well as by Jason Gould) or approximately 20.2%, and (ii) Wellington Management Company LLP which held 1,820,025 common shares or approximately 12.65%. VN Capital disputes the entitlement of Front Street Capital 2004 and its affiliates to vote at the Ceres shareholders' meeting.
Interest of Certain Persons in Matters to be Acted Upon
Except as described herein, to the knowledge of VN Capital and Messrs. Vanasek and Noone, none of Messrs. Vanasek or Noone or VN Capital or any of its managers, directors or officers, or any associates or affiliates of the foregoing has: (i) any material interest, direct or indirect, in any transaction since the beginning of Ceres' most recently completed financial year or in any proposed transaction that has materially affected or will materially affect Ceres or any of its affiliates; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the meeting of Ceres shareholders.
Contacts:
VN Capital Management, LLC
James T. Vanasek
212-393-1140
212-393-1148 (FAX)
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Datum: 09.07.2013 - 21:05 Uhr
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News-ID 276877
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